Tax Rules for Claiming Your Child as a Dependent

The IRS has some decisive rules for determining which parent claims a child

Young woman doing her taxes w/ her daughter.
John Burke/Photolibrary/Getty Images

Tax season can leave newly divorced or separated parents feeling overwhelmed and full of questions they never thought to ask before. The most common questions relate to tax breaks for single parents and figuring out the current tax rules for claiming your child as a dependent. The rules aren't quite as complex as you might fear. At least, they're pretty black and white. 

Tax Rules for Claiming Your Child as a Dependent

Let's say that you and your husband divorced during the tax year and your son lives with you so you're planning to claim him as a dependent on your taxes. Then your ex tells you that he is going to claim your son. Can he do this? What happens if you both claim your child as a dependent

First, it's important to understand that only one of you can claim your son. Each dependent can only be claimed by one taxpayer. The only exception is when married couples file taxes joint tax returns, adding their incomes together and jointly claiming deductions and credits. But you can't file a joint return if you're legally divorced. 

In the case of divorced, separated, or never married parents, the custodial parent typically has first dibs on legally being able to claim a child as a dependent for tax purposes. That's because the dependent deduction goes to the parent with whom the child lived most during the year. If both you and your ex were to file tax returns claiming your son, the Internal Revenue Service would defer to the parent with whom your child lived the majority of the time, and this is almost invariably the parent who has physical custody.

Your ex might try to claim your son, but if your child lives mostly with you and only stays with his father a couple nights a week, the IRS would award the dependent deduction to you. 

Tax Rules for Parents Who Share 50/50 Custody

So what happens if your son lives with each of you an equal amount of time? How do you decide who gets him as a dependent—and perhaps more important, how does the IRS decide the matter? 

First, it's extremely rare that parents really do share physical custody of a child exactly equally, even when they think they have shared custody. Think about it. There are 365 days in most years. This means your son would have to live in each of your homes for 182 and a half days for custody to be an exactly equal split, and this rarely happens.

One parent invariably comes out ahead, even if it's just by a little. Even if you do share physical custody on a very equal basis, your child most likely resides with one of you 182 days of the year and with the other 183 days. The dependent deduction would go to the 183-day parent. 

It's usually smart to keep a detailed calendar as the year progresses so you can pin down exactly how much time your child spent with each of you. You might not want to rely on your custody agreement, because sometimes planned parenting time changes due to illness or other issues. 

But...What If? 

But what if you and your ex really do share exact equal custody? In this case—or if it's really close and the two of you can't decide which parent your child stayed with more—the IRS uses what it calls "tiebreaker rules for claiming dependents" for sorting things out and deciding which parent is eligible to claim the child as a dependent.

The tiebreaker rule for this situation would give the dependent deduction to the parent with the highest adjusted gross income. This same rule would apply if unmarried parents lived together so their child was with both of them 365 days of the year. They both can't claim the child and he would have lived with both of them equally and simultaneously so the parent with the highest AGI would get the deduction. 

Forfeiting Your Right to Claim Your Child as a Dependent

What if you don't want to claim your child even if you're entitled to? Maybe your children have lived most of the year with you. Your ex has had a really difficult year financially. You earned more, so you'd win a tiebreaker in both cases. But you want to be kind and give him the dependent deductions for your kids to help him out. Can you do this?

Technically, yes. There are some exceptional situations in which a custodial parent would want to forfeit his or her right to claim a child as a dependent. You would have to fill out IRS form 8332, the Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent, and submit it with your tax return. But be sure to consult with a legal professional before taking this step so you're fully aware of any unforeseen complications or ramifications this might have in the future.

Tax laws change periodically and the above information may not reflect the most recent changes. Please consult with a tax professional for the most up-to-date advice. The information contained in this article is not intended as tax advice and it is not a substitute for tax advice.